Koena’s Kitchenware (Pty) Ltd (“Koena’s”) manufactures and sells a variety of kitchen utensils and uses a traditional absorption costing system. You have the following information available regarding Koena’s fixed manufacturing overheads for the 2019 and 2020 financial years. Financial year 2019 2020 Budgeted Actual Budgeted Actual Fixed manufacturing overheads (FMO) R7 200 000 R7 000 000 R7 332 850 R7 500 000 Direct labour hours 900 000 906 500 894 250 941 200 Manufacturing units 360 000 370 000 365 000 362 000 Koena’s allocates FMO based on direct labour hours. QUESTION 9 The predetermined FMO allocation rate for the 2019 financial year was (rounded to two decimal places). (1) R20,00. (2) R8,00. (3) R8,20. (4) R7,72. QUESTION 10 The over-/under allocated FMO for the 2020 financial year is. (1) R217 840 over applied. (2) R217 840 under applied. (3) R167 150 over applied.
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
Koena’s Kitchenware (Pty) Ltd (“Koena’s”) manufactures and sells a variety of kitchen utensils and
uses a traditional absorption costing system. You have the following information available regarding
Koena’s fixed manufacturing
Financial year 2019 2020
Budgeted Actual Budgeted Actual
Fixed manufacturing
overheads (FMO)
R7 200 000 R7 000 000 R7 332 850 R7 500 000
Direct labour hours 900 000 906 500 894 250 941 200
Manufacturing units 360 000 370 000 365 000 362 000
Koena’s allocates FMO based on direct labour hours.
QUESTION 9
The predetermined FMO allocation rate for the 2019 financial year was (rounded to two decimal
places).
(1) R20,00.
(2) R8,00.
(3) R8,20.
(4) R7,72.
QUESTION 10
The over-/under allocated FMO for the 2020 financial year is.
(1) R217 840 over applied.
(2) R217 840 under applied.
(3) R167 150 over applied.
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
